It can be hard to believe that one day, we won’t be able to perform day-to-day activities on our own anymore. We will all likely lose our independence at some point. We take for granted our ability to do simple tasks like driving, cooking, cleaning, and bathing.
Your ability to care for yourself could change in an instant, whether because of a debilitating disease, a serious accident, or simply old age.
Considering Americans are now living longer than ever before, it’s likely that you will require some degree of care and assistance in retirement as your health changes, and self-funding that care might be a bad idea. While living a long, fruitful life is certainly a wonderful gift, it also comes with high and increasing costs, especially when you are not adequately prepared for your long term care needs, and these costs could destroy your retirement.
While planning for retirement, it’s important to consider your future healthcare needs. Long term care coverage can help protect you from the costs of care and assistance in your senior years, while also helping you maintain your lifestyle as much as possible.
Long Term Care Insurance: The Basics
Long term care insurance can provide you with financial protection in the event that you become unable to care for yourself for whatever reason, such as deteriorated mental abilities, illness, or aging. This insurance gives you the money that you and your family require to pay for a retirement home, a personal home caregiver, or other type of long term care that you require when you are no longer able to manage daily living activities without assistance.
Long term care insurance can help bring care into your home if you are not yet ready to move to a facility, can lessen the financial burden of caregiving on your family, and can help you manage your care and expenses in the result of an unexpected accident. It can also help you maintain your independence and avoid being a burden on loved ones.
Different Kinds of Plans
There are several types of long term care insurance plans. Some offer a guaranteed dollar amount reimbursement while others are variable, based on rules set out by the insurer. We recommend a guaranteed benefit because it is important for you to know that the money will be there when you need it. Some long term care policies require a large up-front premium payment while others charge you an annual premium for life. Still other long term care coverage comes in the form of a “rider” on a life insurance policy or annuity. All of these options can be confusing, so it makes sense to have an experienced retirement advisor guide you through your options.
Should You Consider Coverage?
Good candidates for long term care insurance include:
- individuals who are concerned that their retirement income might not last the rest of the lives if their health were to deteriorate
- individuals who want to be able to choose the level and type of care that’s right for them
- individuals who want to protect their wealth and legacy from soaring health costs
- individuals who want to maintain their independence as long as possible and avoid being a burden on loved ones
As the American lifespan is now at a record high, it makes good sense for most people to consider including long term care insurance as part of their retirement planning.
How to Apply for Long Term Care Insurance Coverage
If you believe that long term care coverage is right for you, your first step to applying for a policy is to talk to your financial advisor, who will be able to help you select the right plan to meet your needs in order to ensure the best possible retirement. Make sure to have information about your income, assets, and liabilities handy, so you can offer the additional details that your advisor will need to recommend the right policy.
Once you’ve found the right plan, your advisor will handle all of the paperwork for you. Then, your application will be evaluated by the insurance company—you might need to fill out a personal history questionnaire and have a brief medical exam before you’re approved.